From Application to Approval: Breaking Down Broker-Dealer Registration

Understanding Broker Dealer Registration

In order to conduct securities transactions and business with the investing public, both firms and individuals need to be registered with FINRA. Individuals need to pass certain securities examinations based on the type of business they will engage in, and firms must go through FINRA’s membership application process and be granted approval by FINRA. Applying for this membership is an extensive process with multiple steps. We receive many, many questions about the broker dealer registration process. The following article covers some of the most common topics.

Starting Your Broker Dealer: Pre-Filing Preparation

No doubt, starting a broker-dealer is a complex process, with many potential pitfalls as you work your way through FINRA’s registration process. Even before you file anything with FINRA, your firm needs to:

• have a plan;
• know exactly what securities business in which you want to engage;
• have the supervisory structure identified; and,
• have all business contracts and agreements, procedures, financials, books and records, etc., ready to submit to FINRA.

Importantly, each Firm needs to demonstrate to FINRA that it meets the Standards of Admission as outlined in FINRA Rule 1014.   

Leveraging FINRA New Membership Application Tools

Over the past few years, FINRA has been providing guidance to Firms seeking to go through the membership process by posting membership application tools to its website. These tools provide valuable information on what to include in your FINRA application. Membership Application Program (MAP) Tools | FINRA.org FINRA continues to provide additional guidance based on the type of business or transaction a Firm is seeking approval for, so it is a good idea to keep checking the website for additional updates.

What Does It Cost? FINRA Registration Fees Explained

One of the things firms typically ask as they are considering becoming registered with FINRA is “how much will it cost?” As you can imagine, there are numerous costs associated with becoming a registered broker-dealer. From licensing fees, general registration fees, branch fees, state filing fees and of course the membership application fees. All of this can really add up for a firm and is important for firms to consider as they are doing their budgeting and financial planning.  A schedule of membership fees can be found here.

FINRA recently filed notice with the SEC of its intent to increase fees in future years, noting that the fee increase will help support FINRA’s mission from 2025-2029. As per the filing, most fees will be implemented in 2026.

How Long Does It Take? Timelines for Approval

By Rule, FINRA has 180 days to render a decision on an application. Once you have all the key information and documentation ready to file your application with FINRA, then the fun really begins.  

Firms can help make the process easier and more efficient by taking the time to build a comprehensive business plan and provide FINRA with as much information in your initial filing as possible. In fact, we encourage firms to participate in FINRAs Early Firm Meeting, where they meet with members of the FINRA MAP team, even before they file their application.

Once you submit your application, the process is then iterative with the FINRA MAP team asking questions about every 30 days, and the firm responding. For new member firms, FINRA requires a Membership Interview. For firms that are hosting a platform or mobile application, systems must be “operationally ready” at time of filing for demonstration to FINRA.

Additional Resources

Deep Dive: The NMA and CMA Process

Growth and Compliance: Navigating FINRA Registration Requirements

SEC Rule 15b9-1 Expands FINRA Oversight

How To Launch Your Alternative Trading System (ATS)

Expert Support for Your Membership Application Process

For most firms, having assistance navigating the FINRA New Member Application process is critical. From creating your business plan to identifying the information and documentation to submit, having former regulators and FINRA New Member Application experts guide you through the process can save time and effort. Oyster Consulting’s registration experts have successfully guided many new broker-dealers through the process, from start-ups to complex organizations. Our team of registration experts will review your business structure, plan and documentation to determine the best approach. We understand how to design practical and reasonable regulatory compliance programs. Take advantage of our experience and let our industry NMA experts turn one of your firm’s toughest challenges into a smooth process.

If your firm is hosting a platform or mobile application, Oyster Consulting has technology experts who can assist with various types of securities industry technology platforms. From providing outsourced CCO and FinOp roles and selecting the best clearing provider to our Oyster Solutions GRC software platform, we have all the pieces you need to start your broker-dealer.

Compliance Software That Automates and Integrates

Streamline your firm’s compliance program with Oyster Solutions. Today’s industry demands an efficient and effective compliance program.  Oyster Solutions’ powerful integration and automation provide the accurate supervision and the reporting structure that regulators demand, all while giving your employees a streamlined, easy to follow experience. With Oyster Solutions, you get an enhanced calendar that schedules compliance workflows, notifies users of tasks and guides employees step-by-step through the process – including attestations, OBAs, PSTs and gift logs. Stay on track by setting reminders if tasks are overdue.

The Oyster Solutions Monitor Module allows you to efficiently manage the surveillance, trade supervision and regulatory compliance of your client and employee trade activity. Utilize the Oyster Solutions alert engine to constantly monitor for potential exceptions by comparing transactions, positions and fees to client profiles.